Question

mention 4 features of a static economy​

Answer 1

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What is Static Economy?

The word ‘static’ has been taken from physical science. It points to a position of complete rest.

In other words, by static is meant a position where there is the absence of any movement.

But the concept of statics has its different meaning in economics. It does not point to a position of complete rest or no movement.

In economics, the concept of static refers to a situation where there is a movement. But this movement is continuous, certain, regular and constant. Static economics does not deal with the unexpected changes. It studies only the expected economic activities. There are no windfall changes or fluctuations in economic activities. According to Prof. Harrod, “An economy in which rates of output are constant is called static.”

Economic activities are repeated in different time periods in a static economy. No changes in economic activities occur. For example, India’s national income increased by 5% in 1977-78. The increase in 1978-79 and 1979-80 was also 5%.

The study of national income is called a static analysis because the rate of increase in national income is the same. In other words, this study of India’s national income shows that Indian economy passed through a stationary state during these years. According to J R. Hicks, “Economic statics covers that part of economic theory where we do not trouble about dating.”

Features:-

(¡) No change in the population and its composition.

(¡¡) No change in the quantity of capital.

(¡¡¡) No change in the techniques of production.

(¡v) No change in the working and organisation of industrial units.

Answer 2

Answer:

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